Do Artists Benefit from Online Music Sharing?

Ram D. Gopal and G. Lawrence Sanders
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Ram D. Gopal: University of Connecticut
G. Lawrence Sanders: State University of New York at Buffalo

Journal of Business, 2006, vol. 79, issue 3, pages 1503-1534

Abstract: We present a model of online music sharing that incorporates economic and technological incentives to sample, purchase, and pirate. Contrary to conventional wisdom, we find that lowering the cost of sampling music will propel more consumers to purchase music online as the total cost of evaluation and acquisition decreases. Attempts to prevent sampling will be counterproductive in the long run. Sharing technologies erode the superstar phenomenon widely prevalent in the music business. Extensive empirical investigations, based on surveys and Billboard ranking charts, lend support to the economic model and validate the key results.

Date: 2006
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